Wealthy Americans Are Giving Less Of Their Incomes To Charity, While Poor Are Donating More

In the wake of the Great Recession, the richest Americans are donating less to charity, while the poorest are giving more, according to a new study.

In a report released today, the Chronicle of Philanthropy found that Americans who earned at least $200,000 gave nearly 5% less to charity in 2012 than in 2006.

Higher-income people tend to give proportionately less during tough economic times, says Stacy Palmer, editor of the Chronicle of Philanthropy.

“The downturn was a shock to so many of them, and they’ve been nervous and cautious,” she says.

The shift has likely meant less money flowing into universities, hospitals and cultural institutions, which the wealthy tend to patronize. Lower- and middle-income donors often give to social service organizations, Palmer says. In part because these groups have had fewer dollars to give, those organizations have still faced a squeeze.

Unlike their wealthier counterparts, low- and middle-income Americans — those who made less than $100,000 — gave 5% more in 2012 than in 2006, the Chronicle found. The poorest Americans — those who took home $25,000 or less — increased their giving by nearly 17%.

“Lower and middle-income people know people who lost their jobs or are homeless, and they worry that they themselves are a day away from losing their jobs. They’re very sensitive to the needs of other people and recognize that these years have been hard,” Palmer says.

Religiosity is another factor driving up giving among low- and middle-income Americans, she says.

Wealthier Americans still gave more in absolute terms, increasing their donations between 2006 and 2012 by $4.6 billion, adjusted for inflation, to $77.5 billion. In that period, the collective wealth of Americans on The Forbes 400 soared by $1.04 trillion.

Those who earned less than $100,000 gave $57.3 billion in 2012.

The steepest declines in charitable giving were in America’s biggest cities, the Chronicle found. People donated a smaller share of their incomes in 2012, compared with 2006, in 36 of the nation’s largest metropolises. The sharpest drops were in Philadelphia and Buffalo, N.Y. where the share of income donated decreased by more than 10%. Los Angeles, Minneapolis-St. Paul, and Washington, D.C., weren’t far behind, with declines of more than 9 percent.

Utah residents were the most generous in the nation, donating $65.60 to charity for every $1,000 earned. Salt Lake City was the most philanthropic metropolis, with residents giving away more than 5% of their incomes. This was largely due to the large population of Mormons, who are urged to donate at least 10% of their incomes to charity.

Out of the 50 largest cities, Las Vegas saw the biggest jump in charitable giving as a share of income. Residents gave nearly 15% more of their incomes to nonprofits in 2012. Among states, Nevada also saw the fastest-growing rate of donations.

New Hampshire was the least generous state, with residents donating $17.40 of every $1,000 earned.

In all, Americans donated $180 billion to charity in 2012, the study found.

The Chronicle analyzed Internal Revenue Service data from Americans who itemized deductions, including charitable gifts, in 2006 and 2012. It measured giving relative to adjusted gross income. The data included about 80 percent of individual donations to charity in those years.